In Lane v. Bank of New York Mellon (In re Lane), No. 18-60059, 2020 WL 2832270 (9th Cir. June 1, 2020), the United States Court of Appeals for the Ninth Circuit was asked to decide whether a bankruptcy court may void a lien under section 506(d) of the Bankruptcy Code when a claim relating to the lien is disallowed because the creditor who filed the proof of claim did not prove that it was the person entitled to enforce the debt the lien secures. Employing a narrow reading of section 506(d), the Ninth Circuit answered the question in the negative.

One of the landmark protections enacted by the Coronavirus Aid, Relief and Economic Security, or CARES, Act on March 27 was the Paycheck Protection Program, or PPP. Under the program, small businesses (e.g., those with fewer than 500 employees) — and certain other businesses in specific industries — are eligible to receive loans that will be fully forgiven if utilized under the terms of the program, including applying at least 75% of the funds received from the loans to payment of payroll expenses.

The nearly $350 billion loan program made available to small businesses by the Coronavirus Aid, Relief, and Economic Security (CARES) Act was tapped out in less than two weeks. In response to this overwhelming demand, on Friday, April 24, 2020, an additional $320 billion was funded into the loan program, and the second round of applications for small businesses requesting these loans will open on Monday, April 27, 2020.

In this article, we focus on working capital and consider ways a business can seek to weather the storm and preserve all-important liquidity through this challenging period.

Practical Tips

Given the unprecedented challenges presented by COVID-19 globally, what can senior management do in order to manage and mitigate the risk to the company's financial health?

The United States Court of Appeals for the Third Circuit issued an opinion on December 24, 2019, In re Homebanc Mortgage Crop., No. 18-2887, 2019 WL 7161215(3rd Cir. De. 24, 2019) that has significant consequences for participants in repurchases transactions. The court affirmed the lower court judgment, that the securities had been liquidated in good faith.

Facts

Section 546(e) of the Bankruptcy Code is a safe harbor provision that establishes that a trustee or debtor-in-possession may not avoid a transfer “by or to... a financial institution.. in connection with a securities contract” other than under an intentional fraudulent conveyance theory. On December 19, 2019, the Second Circuit in Note Holders v.

In 2007, Philadelphia Entertainment and Development Partners, LP dba Foxwoods Casino Philadelphia (“Plaintiff”) secured a gaming license from Pennsylvania for $50,000,000 with the understanding that it open its casino business within one year. Plaintiff failed to do so and, despite a number of extensions, Pennsylvania cancelled and revoked the gaming license in December 2010. Without a gaming license, Plaintiff found itself in chapter 11 by spring of 2014.

The Bankruptcy Protector has previously provided a succinct summary of all cases decided post-Jevichere and

In In re FirstEnergy Solutions Corp., 2019 WL 6767004 (6th Cir. Ct. App.), the United States Court of Appeals affirmed in part, reversed in part, and remanded to the bankruptcy court for further consideration, the determination that the bankruptcy court held exclusive and unlimited jurisdiction and therefore could enjoin FERC from taking action regarding energy contracts because under the BJR they were financially burdensome on FES and as such could be rejected.

Facts

The First Circuit Court of Appeals issued an opinion on October 29, 2019, in In re TelexFree, LLC, No. 18-2001, 2019 WL 5558088, at *1 (1st Cir. Oct. 29, 2019) that has significant consequences for ponzi scheme litigation in bankruptcy court.

The TelexFree Ponzi Scheme and Related Bankruptcy Litigation